REPORTS POINT TO SOLID U.S. HIRING IN JUNE

Brighter jobs outlook helped stocks end the day higher, offsetting other concerns

U.S. companies stepped up hiring last month, a private survey showed Wednesday. And the government says fewer people applied for unemployment benefits last week.

The latest data point to steady job growth, an encouraging sign ahead of Friday’s government report on June employment. The brighter hiring outlook also helped stocks end the day higher, trumping higher oil prices and worrying developments in Europe’s debt crisis. The Dow Jones industrial average closed up 56.14 points, or 0.4 percent, at 14,988.55.

Further job gains could lower the unemployment rate, which is still high at 7.6 percent, and help economic growth rebound in the second half of the year. If growth accelerated and unemployment fell, the Federal Reserve might start to scale back its bond purchases before the year ends.

“The labor market remains one of the healthiest parts of the economy right now,” Ethan Harris, global economist at Bank of America Merrill Lynch, said.

Economists forecast that the June jobs report will show employers added 165,000 jobs. That’s roughly in line with the average of 175,000 jobs a month the economy has gained in the past 12 months. The unemployment rate is expected to remain 7.6 percent. That’s down from 8.2 percent a year ago.

Wednesday’s reports had some economists suggesting that the June job gains could be higher than forecast.

Payroll provider ADP said businesses added 188,000 jobs in June, up from 134,000 in May and the most since February. Construction firms added 21,000 jobs, a sign the housing recovery is boosting hiring. Small businesses — those with less than 50 employees — added 84,000 jobs. ADP’s survey has frequently diverged from the government’s figures.

The number of Americans applying for unemployment benefits fell 5,000 to a seasonally adjusted 343,000 last week, the Labor Department said in a second report. The less volatile four-week average dipped 750 to 345,500 and is 9 percent lower than a year ago. Weekly applications for unemployment benefits are a proxy for layoffs. The current level is consistent with modest but steady hiring.

A third report from the Institute for Supply Management points to stronger hiring by service firms last month. A gauge of employment jumped to 54.7, up from 50.1 in May. That’s the first increase in five months.

The ISM’s overall index of service-sector activity fell to 52.2 from 53.7 in May. While any reading above 50 indicates expansion, it was the lowest in more than three years. Steep drops in new orders and a measure of the business outlook lowered the index.

Despite the hiring gains, the economy is growing at a sluggish pace. It expanded at a 1.8 percent annual rate in the January-March quarter.